Availability rate in Q3 spiked to 36% in San Francisco. Sublease space nearly doubled YoY in Silicon Valley. Leasing activity collapsed. More landlords default.

By Wolf Richter for WOLF STREET.

The office nightmare brought on by working from home and Corporate America’s sudden epiphany that they will never need all this office space, keeps on giving: Despite all the hype and hoopla about AI, the office space on the market and available for lease in San Francisco in Q3 jumped to a stunning 36.3% of the total office space, another all-time record, up from 35.1% in Q2, according to Savills.

Including 9.4 million square feet (msf) of sublease space, 31.5 msf of office space is now on the market. Sublease space is where tenants have decided they don’t need this space and attempt to find a tenant for the space until the lease terminates.

Asking rents have remained stubbornly enormous at $69.15 per square foot per year in Q3, despite the massive availability, though they have come down some from the highs in 2019 of over $80 per square foot per year. But asking rents are just that. Reality when leases are finally signed looks very different as landlords are desperate to make deals and are offering “record high concessions,” according to Savills (chart via Savills, gray columns, left scale = rents; orange line = Class A availability, yellow line = total availability, right scale):

And if landlords cannot bring in or keep tenants at rents that are high enough to meet the loan costs and operating costs, they default on the loan. Defaults on office buildings is now a constant drumbeat. In August, another three were reported whose mortgages were sent to special servicing, according to the SF Chronicle, citing DBRS Morningstar. Assignment to a special servicer indicates that a default is either imminent or has already occurred:

The landlord of 222 Kearny Street (148,000 sf), GEM Realty Capital in Chicago, missed a payment on the $24 million loan in August. The building is 27% vacant. Part of the remainder is leased to WeWork, which is teetering on the edge of a bankruptcy filing.

The landlord of 995 Market Street (91,000 sf), Bridgeton Holdings in New York, defaulted on a $45 million loan. The building is now 92% vacant. WeWork, which had leased 75% of the building, opted to terminate the lease early in August 2021 and was outa there. “The borrower has stated they will not be making any more payments,” the special servicer said in a note in August, cited by Morningstar, according to The Real Deal.

The $12.5-million mortgage on 1045 Bryant Street (35,000 sf) – a “high-end brick and timber building,” as the 1916 building, renovated in 2014, is now being pitched – was sent to a to a special servicer, indicating default or imminent default by the landlord, PBV VI. The building is vacant.

CMBS, of course. The mortgages tied to these three buildings, like most of the mortgage defaults on office properties that have come across our desk, are not held by banks, but had been securitized into Commercial Mortgage-Backed Securities (CMBS) and sold to investors. When these mortgages get into trouble, they’re sent to the special servicer that represents the CMBS holders.

Nationwide, defaults on office CMBS are now spiking at an astounding rate.

The market for sales of office building is beginning to unfreeze in San Francisco, but at discounts of 60% to 75% off from where they’d been valued a few years ago. We discussed the first two sales that took place in the new era here (75% off), and here (70% off), and there have been a few more sales since then in the 60% to 75% off range.

Office values massively repriced, office rents not yet. Part of the reason for rents remaining ridiculously high even for vacant space is that landlords must have a minimum amount of rent income or potential rent income to even have a chance to cover the interest expense and operating costs. They cannot cut their rents by a significant amount. Instead, they’ll default, take their loss on their equity, and let the lenders have the building and take the remaining losses.

The lender can then sell the building at a huge discount from its previous valuation, and at a huge loss on the loan, attract a new developer that, now with a lower cost basis, can fix up the building, and market the space at lower rents, which would push down overall rents and revitalize the totally overpriced market. Price can solve all kinds of problems.

That’s at least how it should happen – but that process is slow and hasn’t happened yet. And rents are still too damn high.

By sub-market, the availability rates ranged from 27.7% in the Union Square/Civic Center area to a catastrophic 57.9% in the Yerba Buena area, according to Savills. The Financial District North had an availability rate of 32.1%; the Financial District South 34.6%, both below the city average.

Leasing activity fell to just 0.8 msf in Q3, from 1.1 msf in Q2 and from the 2.5-msf range before the pandemic. Of the 10 largest leases signed:

• The top three were signed by, you guessed it, generative AI startups. But one of them, Hive AI, was just a relocation.
• Three were relocations: company vacates one office, moves to another office, not helping the overall office market; and if the move, as is now often the case, involves downsizing, it worsens the office market.
• One was a renewal.
• Six were new leases.

In Silicon Valley, the office availability rate remained that the record high seen since last year of 26.6%, with Class A availability rates over 30%, according to Savills.

Availability rates topped out at 35.9% in Downtown San Jose, 33.5% in Mountain View/Los Altos, 34.4% in Campbell/Los Gatos, and 29.7% in Santa Clara.

About 24 msf of office space was available for lease, including sublease space, which nearly doubled year-over-year to a record 7.6 msf.

Leasing activity plunged 60% year-over-year to just 652,000 sf, and was down from the 1.5 million to 2.8 million range in 2018 and 2019.

And yet despite the huge availability and the plunge in demand – oh, you knew this was coming – asking rents in Q3 rose 3.0% year-over-year to $5.22 per square foot per month ($62.64 psf per year), in part on a shift in mix, as “higher priced space is now available on the market both directly and for sublease,” according to Savills.

Of the top 10 leases signed:

• The top two were just renewals.
• One was a lease restructure.
• Seven were new locations

(Chart via Savills, gray columns, left scale = rents; orange line = Class A availability, yellow line = total availability, right scale):

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The post Regardless of the AI Hype, Workplace Markets in San Francisco & Silicon Valley Get Even Worse appeared first on DAILY SAN FRANCISCO BAY NEWS.

By Jamie Chisholm

Critical information for the U.S. trading days

Wall Street is undecided about trying for another rally on Friday, according to early trading in futures. That’s in keeping with the struggle it has been of late, with the S&P 500 SPX down six of the last eight sessions amid August’s bearish tendencies.

Some technical factors are causing concern. The Nasdaq 100 NDX is in danger of decisively falling back below its 50-day moving average support trend. Apple (AAPL) did so a week ago, and now its relative strength index, a gauge of momentum, has swiftly dropped to 30, signaling the stock may soon enter short-term oversold territory.

Over the same short period, the yield on the 10-year Treasury BX:TMUBMUSD10Y has twitched within a range of roughly 4% to 4.2% as investors try to get a handle on varying inflation and economic growth readings.

So, what’s an investor to do amid such uncertainty? Well, buy the companies that help traders to trade it, reckons VGI Partners, the Australia-based fund manager. In it’s semi-annual investor letter, covering performance to the end of June, VGI highlighted the top ten long investments in its Global Investments fund , three of which provide, to varying degrees, what may be termed the plumbing of the financial markets.

With a weighting of 7% is the London Stock Exchange , which VGI is keen to point out has transformed from a traditional exchange into a data and analytics group. After its purchase of data group Refinitiv in 2021, the LSE now generates only 3% of revenues from its legacy cash equities exchange.

Deutsche Börse represents about 8% of the portfolio and is deemed atractive says VGI because it provides trading, clearing, pre/post-trading and data and analytic services in four key operating segments: Trading & Clearing, Fund Services, Security Services and Data & Analytics.

DB is a “well-diversified exchange group whose activities touch on most aspects of European capital markets, offering a blend of transactional and non-transactional revenue exposure,” VGI adds.

But top holding is CME Group (CME), with a 9% weighting. CME operates futures and derivatives exchanges, including the Chicago Mercantile Exchange, the New York Mercantile Exchange, the Chicago Board of Trade, and the Dow Jones Index Services.

VGI particularly likes CME’s “effective monopoly” of trading in interest rate derivatives. “Demand for interest rate derivatives is driven by volatility in interest rate markets, whose effect is compounded by the number of bonds held by those looking to manage interest rate risk and, by extension, market liquidity,” the fund manger notes. And the chart below illustrates this strong relationship.

VGI expects the growth in the size of the U.S. Treasury market, particularly in relation to privately held US treasuries as the Fed undergoes a balance sheet unwind, to provide important support to a CME’s interest rate derivatives business. CME should also benefit — as are other exchanges — from a boost to net interest income from the collateral balances it holds.

“We believe that CME’s assets are critical pieces of market infrastructure and will be recognized as such in the future,” VGI concludes.

Markets

U.S. stock-index futures , , are little changed as benchmark Treasury yields BX:TMUBMUSD10Y dip. The dollar DXY is lower, while oil prices slip and gold gains.

Try your hand at the Barron’s crossword puzzle and sudoku games, now running daily along with a weekly digital jigsaw based on the week’s cover story. To see all puzzles, click here.

The buzz

Economic data on Friday, include the July producer price index report, due at 8:30 a.m., and the August consumer sentiment reading at 10 a.m.. Both times Eastern.

UBS Group (UBS) has terminated a 9 billion Swiss franc ($10.27 billion) loss-protection agreement and a CHF100 billion public-liquidity backstop guaranteed by the Swiss government that were put in place at the time of its takeover of troubled rival Credit Suisse.

The pound rose back above $1.27 after data showed the U.K. economy grew 0.5% in June, more than twice the 0.2% expected.

Country Garden shares fell nearly 6% to below HK$1 for the first time as China’s biggest homebuilder warned of a loss and suffered another ratings downgrade of its debt.

Shares of Cano Health Inc. (CANO) are down more than 50% in Friday’s premarket after the primary-care provider and health-management platform said there was “substantial doubt” about its ability to keep operating.

Best of the web

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The chart

Just a reminder from Christopher Wood, global head of equity strategy at Jefferies, of why some investors are getting twitchy about the recent rally in oil pries because of how it may clobber the happy narrative that major central banks can soon stop raising interest rates.

“The correlation between the Brent crude oil price and the five-year forward inflation expectation rate has been 0.88 since 2011,” says Wood. “This is potentially an awkward development in the context of the prevailing narrative that both the Federal Reserve and the ECB are all but done in this tightening cycle even if the official mantra in both cases remains ‘data dependent’.”

Top tickers

Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.

Ticker Security name
TSLA Tesla
MULN Mullen Automotive
AMC AMC Entertainment
NIO Nio
WE WeWork
NVDA Nvidia
GME GameStop
TTOO T2 Biosystems
AAPL Apple
NKLA Nikola

Random reads

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-Jamie Chisholm

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08-11-23 0654ET

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The post If America’s debt spiral will get worse, this is the inventory which will profit, says fund supervisor appeared first on DAILY SAN FRANCISCO BAY NEWS.

Homelessness has been rising in America’s West Coast cities for more than a decade. Entire blocks of Los Angeles, San Francisco, and Portland are occupied by tent encampments plagued by violence, drug overdoses, and disease.

But the problem is concentrated in a handful of cities; nationwide the homeless population has been shrinking for a decade. To figure out why some places are so much more successful than others, we took a trip to Texas where the homeless population declined almost 30 percent over the last decade. (It grew by more than 40 percent in California in that same time span.) Today, the Lone Star state counts 90 homeless people per 100,000 residents. In California, the problem is almost five times as bad.

Not only does Texas have vastly different politics and policies from the West Coast, but it’s also home to three large cities with three very different approaches to homelessness: Austin, San Antonio, and Houston.

From a privately run village of tiny homes just outside Austin to a nonprofit serving San Antonio’s homeless with an intensive, no-excuses treatment and skills training program to a single, centralized provider in Houston that’s streamlined its approach to quickly house thousands of the city’s homeless residents, what we found in Texas was innovation.  

But the federal government doesn’t fund innovation. For decades, it’s committed to a one-size-fits-all approach known as “Housing First.” States like California have followed suit, leaving many charities with a choice to either fall in line or turn down millions in federal and state grants.

The result: More people living—and dying—on the streets as governors and big city mayors promise that the much-awaited free, permanent housing is just around the corner.  

Our first stop was the city of Austin, where progressive activism exists in the shadow of a conservative state house. It’s a boom-and-bust town—a magnet for business and tech innovation, which has lured some of Silicon Valley’s top performers. When the ultrarich moved in, housing prices started to resemble San Francisco’s, and the homeless population climbed.

Policy-wise, Austin has a lot in common with West Coast cities, which helps explain the huge encampments here. But Austin has an advantage that San Francisco and Los Angeles don’t: When you walk over the city line, you’re in a more typical Texas municipality, where light-touch regulation allows innovative approaches to thrive.

The outskirts of Austin are home to Community First! Village, a 51-acre community of tiny homes. The project doesn’t rely on federal money and, therefore, isn’t bound by rules imposed by Washington.

Alan Graham, who founded Community First! Village, attributes homelessness to a lack of a supportive network of friends, family, and neighbors. He seeks to rebuild that network by giving formerly homeless people the opportunity to live in a community again. The homes are intentionally designed with large front porches within a walkable community to encourage socialization among neighbors.

“The single greatest cause of homelessness is a profound catastrophic loss of family,” says Graham. 

To live here, residents have to respect the law and follow rules like keeping pets leashed, keeping junk off their driveways, and keeping drug use out of the common areas. But behind closed doors? That’s their business.

“What we always wanted is for people to live the way that people want to live,” says Graham. “Here in the United States of America, we have an extraordinary number of freedoms. We don’t want people coming into our homes seeing what we do in the privacy of our own homes.”

Graham says there’s one rule above all others: You must pay rent. The monthly rent for one of these houses is between $240 and $440 depending on the size and amenities, which residents typically pay out of their monthly social security or disability benefits. Graham says that before the pandemic, they collected 99 percent of rent owed.

“It turns out that people that have skin in the game are bought into the game far more than people that don’t have skin in the game,” says Graham.

Mobile Loaves & Fishes, Graham’s nonprofit, launched Community First! Village with about a dozen homes in 2015 and has since expanded to more than 300. The goal is to reach 500 units by the end of this year to meet the growing demand, while also breaking ground on 127 acres across the street and inside Austin, an expansion underwritten by $35 million of funds from the federal American Rescue Plan Act that will eventually make way for 1,400 more homes.

Community First! Village is located just outside Austin city limits. Graham says it would have been impossible to build it on the other side of the line.

“We are blessed with the reality that there is no zoning, no discretionary land use authority outside of a municipal boundary,” says Graham. “And that’s a big deal because that’s the only tool that NIMBY[s] can sink their teeth into.” 

“NIMBY” stands for “not in my backyard”—a term used to describe activists who lobby to block new real estate development. Within Austin city limits, developers have to contend with zoning restrictions and preservation laws which have made it hard to meet the huge increase in demand caused by wealthy professionals fleeing coastal cities.

Residents thwarted plans to rewrite the zoning code, which would’ve allowed more vacant or underutilized properties to be transformed into multifamily housing units with nearby retail. In contrast, existing strict business and residential demarcations make such mixed developments more difficult.

A common refrain among urbanists and disgruntled residents is that Austin is like San Francisco in the ’90s: Those who migrated to the city and bought houses early stand to gain from the soaring prices, but many others are getting priced out or pushed farther from the city center.

“The city of Austin itself, which is probably where the most [local] demand [for housing] would be, is hyper NIMBY,” says urbanist Scott Beyer, who has studied the interaction between zoning laws, housing prices, and homelessness. He points out that Austin’s suburbs have stayed relatively affordable despite large population growth.

Still, many Austinites don’t appear to see the relationship between the zoning and land use changes they oppose and the fact that affordability is getting worse and worse.

But such land use restrictions—especially zoning—shaped the ability of each city we visited to respond to its homelessness problem.

Another crucial aspect was the strings attached to government funding. As the operator of a faith-based charity not reliant on federal funding, Graham is free to experiment, including by coming up with cheaper ways to build his tiny homes. Some tiny homes are 3D printed, while others are prefabricated, and still others are bare-bone shacks that don’t contain any plumbing and require residents to use shared kitchens and bathrooms.

“People want our government to be risk-free, and as a result of asking [the government] to be risk-free, it lacks innovation,” says Graham. He says the average unit in Community First! Village costs about $80,000.

Federal funding requires that homeless service providers conform to the policy approach of Housing First, which focuses on getting clients into apartments as quickly as possible. Services can then be offered as an option, but they’re not stipulated, nor is “readiness” for independent living assessed. Graham says this approach is limiting.

“[Housing First is] an important piece of the puzzle, but it can’t possibly be the only piece of that puzzle,” says Graham. “We need community first.”

But Community First! Village may have its own limitations. The pandemic put extra stress on them as an eviction moratorium made enforcing basic rules more difficult, and one resident told us safety concerns have grown along with the population of the neighborhood, raising questions about whether or not to hire a security team, which would be costly and could change the entire nature of the community.

And although they are quickly scaling up, Community First! Village only serves a fraction of Austin’s estimated 4,600 homeless population. The city of Austin’s lead homelessness agency accepts money from the Department of Housing and Urban Development (HUD) and is therefore subject to the same federal mandates that operators in California are.

Most concerning for many Austinites is the growing visibility of the unsheltered homeless population. In 2019, before the pandemic, the City Council repealed Austin’s 23-year-old anti-camping ordinance, which led to so much street camping that voters reinstated the ban with a 2021 referendum called Proposition B.

Austin’s combination of street camping, artificially constrained housing supply, and a network of homeless service providers hamstrung by federal guidelines has led to the city beginning to resemble some of the worst failures of the West Coast.

And that brings us to San Antonio, which blazed its own path for helping the homeless.

“We weren’t so interested in feeding someone overnight or putting them up overnight…. Our goal was to make them different people, have a different life, and be able to participate in our society,” says ​Phil Hardberger, who served as San Antonio’s mayor from 2005 to 2009, a period in which the city’s homeless population grew by about 1,000.

But he helped to reverse this trend by partnering with Valero’s founding CEO Bill Greehey to build a nonprofit homeless service provider called Haven For Hope on a 22-acre lot owned by the city. To build the campus, Greehey raised more than $100 million, mostly from the private sector, and contributed lots of his own fortune.

Today, Haven For Hope offers room and board, health care, child care, and even a kennel, as well as a comprehensive life skills program that includes job training, mental health counseling, and addiction treatment.

To live in the dorms on the main campus, residents have to agree to learn practical life skills, make it to class, attend counseling, stay clean, and continue along the path to independence.

For people unable or unwilling to follow the program, or who just need immediate assistance to get off the streets for a night or two, there’s a separate area called the Courtyard, which offers security, heat, food, laundry, and a shared indoor space with beds. The same counseling and treatment services are offered on this side, but they aren’t mandatory.

The nonprofit serves about 85 percent of San Antonio’s homeless population, serving about 7,000 people a year. According to internal reports, Haven re-houses about 1,000 clients a year. Ninety-one percent have stayed in their new homes after a year.

Kim Jefferies, Haven for Hope’s president and CEO, says that private funding has given them the flexibility to offer services better tailored to the needs of their clients.

Shelters that rely heavily on federal funding are subject to more restrictions because of the one-size-fits-all “Housing First” mandate championed by Democrat and Republican administrations.

The Housing First movement started in the 1980s and took off amid the George W. Bush administration’s “compassionate conservatism” agenda.

President Barack Obama completed the pivot to a federal Housing First policy with the HEARTH Act of 2009, which made focusing on rapid re-housing a requirement for those receiving federal funds

The result was predictable: Federal money was spent on pricier permanent supportive housing, and the use of temporary emergency shelters decreased. Facing a critical lack of beds, shelters started turning people away.

In 2018, the 9th Circuit Court of Appeals upheld a ruling that enforcement of anti-camping laws in cities lacking emergency beds was cruel and unusual punishment and thus unconstitutional. With major cities lacking adequate beds and therefore the legal right to prohibit street camping, entire neighborhoods of Los Angeles and San Francisco turned to squalor.

San Antonio doesn’t allow street camping, though like in any large city, it’s possible to find encampments nestled beneath overpasses. Jefferies says they work with city officials to notify homeless individuals of their options in advance of an encampment sweep.

“And so [San Antonio doesn’t] allow [street camping]. So I think that is helpful in our success in getting people off the streets,” says Jefferies.

Beyer says that there should be “a hundred different models” for homeless provision because homelessness is complex, is caused by many different factors, and often requires different solutions. In a recent policy report he co-authored for California’s Independent Institute, Beyer analyzed some of the problems with Housing First.

“The intentions were good, but I think also the outcomes could have been quite predictable in a sense,” says Beyer. “If you’re funding people to live on the street in a state of disrepair… and you say that even despite living like this, you’re gonna get free housing… it seems like you would encourage a lot more of that behavior.”

Beyer argues that mandating Housing First has crippled policy innovation in major West Coast cities and that the nonprofit sector would benefit from more experimentation in their approaches to mitigating the problems that lead to homelessness.

“I think a lot of that innovation is getting squelched when we have a federal government that only allocates grants based on this one very specific model that we call Housing First,” says Beyer.

Jefferies estimates a Housing First approach would work for about 15 percent of the approximately 7,000 homeless individuals who come through Haven For Hope every year.

“[The other 85 percent] need different kinds of stability before they move into that model,” says Jefferies. She says that because San Antonio invested heavily in emergency shelter beds in contrast to HUD’s shift towards Housing First, the city was better able to adapt. “The approach followed the funding, and so we can have different interventions for different people because we’re not totally reliant on the federal government to fund it.”

Three years after L.A. voters passed a $1.2 billion bond measure to help the city’s homeless population, the city had completed just 1 percent of the promised 10,000 units. And the average cost of building each apartment was about half a million dollars. At the high end, the cost of each exceeded $800,000.

Union Rescue Mission, one of the city’s largest and oldest homeless service providers, didn’t get any of that funding—because it didn’t conform to the Housing First approach mandated by the state of California. Union Rescue Mission CEO Andy Bales told Reason in 2019 that city officials laughed at him for suggesting a different approach.

“Some of my counterparts who depend on [voter-approved referendum fund] money, they’re afraid to speak the truth,” says Bales. “They can’t speak the truth, otherwise they would get in great difficulty and be defunded…. I think pride and arrogance is really holding us back from doing some of the needed things we need to do to immediately solve this issue.”

But the winds have changed. In late 2021, an L.A. County supervisor appointed Bales to help oversee the county’s response to homelessness.

“Don’t be afraid of the dogmatic Housing First, permanent supportive housing people,” advises Bales. “Don’t be afraid of the NIMBY.”

There is one city in Texas where Housing First is working well.

As The New York Times reported last year, Houston has reduced its homeless count by more than 60 percent over the past decade, while placing more than 25,000 people in permanent units.

So how did America’s fourth largest city succeed by going all in on Housing First while Los Angeles, San Francisco, and Portland have failed so miserably?

Ana Rausch, vice president of program operations at the Coalition for the Homeless of Houston and Harris County, says it partially has to do with appointing a single agency as the first point of contact for any homeless person seeking help. While many cities have several organizations in this role, Rausch says this centralization makes it easier to efficiently route clients where they need to go and to track outcomes.

She says that the housing readiness approach in San Antonio, which has a metro region population about​ one-third the size of Houston’s, wouldn’t scale.

“You’re basically paying to leave people homeless in a courtyard [in San Antonio],” says Rausch. “See which costs more. I’ve been doing this for 23 years, and the Housing First approach works.” 

Several studies have shown that Housing First does better at keeping chronically homeless people with serious mental illness off the street than more intensive “housing readiness” interventions.

But other research has cast doubt on its effectiveness, its impact on health outcomes, and whether its results hold up over time.

Besides limiting innovation in homeless services, governments also make housing artificially expensive. Rausch says that the reason Housing First works in Houston but not in Los Angeles has everything to do with the cost of building.

“You can’t have your cake and eat it, too, and that’s what’s happening in L.A.,” says Rausch. “They need more affordable housing. They need more physical units built, but they can’t do it because they’re in their own way.”

Houston is famous for not having zoning. Townhouses run up against multifamily apartment buildings sitting atop ground-level businesses. A crematorium neighbors high-end condominiums. Skyscrapers loom over single-family neighborhoods in a city where you just don’t have to ask much permission to build.

“We really have never cultivated this sort of NIMBY mechanism in Houston,” says Tory Gattis, an urbanist who specializes in Houston land regulation. The result of the city’s laissez faire approach is that despite massive population growth over the past decade, housing prices are stable. That’s because it’s difficult for interest groups to stop a development project.

Houston also has no urban growth boundaries, unlike its West Coast counterparts, meaning that in addition to growing upward, housing can easily spread outward to accommodate both affordable city and suburban living. Without zoning, growth boundaries, or excessive environmental review laws, neighborhood groups can’t easily block new housing projects on adjacent land, but master-planned communities and longstanding neighborhoods can create and enforce private deed restrictions to prevent homeowners from suddenly turning a single-family house into a four-story building without community input. Gattis says this is a compromise that more cities would be wise to pursue.

“Protect your single-family neighborhoods. That’s where your biggest political opposition’s going to be, and that’s what Houston’s allowed with the deed restrictions,” says Gattis. “But then let all the rest of your land open up, whether it’s commercial or industrial. Let it go multifamily. If that’s what the market needs, let it go.”

So a major reason Texas has a lower homeless population than California traces back to zoning and construction costs. Housing First works in Houston because it’s so cheap to build. Austin is expensive like a coastal city, but the unincorporated swath of Travis County outside of city limits provided Alan Graham with a spot for his tiny home community.

What’s also working in Texas is a willingness to give local social entrepreneurs the flexibility to craft policies that best serve their homeless populations, instead of adhering to one-size-fits-all federal policies.

“The whole regime of government funding of homeless [response] I think drives out a lot of private philanthropy,” says Beyer. “I think there would be a lot of market appetite for solving homelessness from the philanthropic sector. That does not happen because people just assume the government is supposed to do it.”

Graham believes that there’s a role for government but that it shouldn’t be micromanaging through overly restrictive grants.

“We believe that government should play a subsidiary role to we, the people in mitigating these profound human issues that are out there like homelessness,” says Graham. “But we’ve abdicated this to the government as a society, and we’re reaping what we’re sowing.” 

Music Credits: “Inborn” by Piotr Hummel via Artlist; “Crossing the High Desert” by Lance Conrad via Artlist; “Kill or Be Killed Showdown” by Lance Conrad via Artlist; “Hope and Heisenberg” by SPEARFISHER via Artlist; “Crystalline” by Leroy Wild via Artlist; “Diamonds” by Livingrooms via Artlist; “Deadman Pass” by The Talbott Brothers via Artlist; “Beer House” by Alex Grohl via Artlist; “Martha” by Swirling Ship via Artlist; “Wanderer” by The Talbott Brothers via Artlist; “Finding My Memories” by Yehezkel Raz via Artlist; “Railroad” by Max H. via Artlist; “Who Goes There” by Falconer via Artlist; “Ross Landing” by David Benedict via Artlist; “Country Roads” by Kick Lee via Artlist; “Grey Shadow” by ANBR via Artlist

Photo Credits: DPST/Newscom; John Marshall Mantel/ZUMAPRESS/Newscom; JIM RUYMEN/UPI/Newscom; TERRY SCHMITT/UPI/Newscom; Mike Kane/SanAntonioExpress/ZUMAPRESS/Newscom; Bob Daemmrich/ZUMAPRESS/Newscom; Scott Coleman/ZUMAPRESS/Newscom; Taylor Jones/ZUMAPRESS/Newscom; FRANCES M. ROBERTS/Newscom; RICHARD B. LEVINE/Newscom; Mario Cantu/Cal Sport Media/Newscom; Jana Birchum/Polaris/Newscom; Bob Daemmrich/Polaris/Newscom; Curt Teich Postcard Archives / Heritage Images/Newscom; Jamal A. Wilson—Pool via CNP/Newscom; Michael Ho Wai Lee/ZUMAPRESS/Newscom; Brittany Murray/ZUMAPRESS/Newscom; Wu Kaixiang / Xinhua News Agency/Newscom; Julie Edwards / Avalon/Newscom; David Crane/ZUMA Press/Newscom; Peter Bennett/Citizen of the Planet/Newscom; Facebook/Haven for Hope; Facebook/Coalition for the Homeless of Houston; Flickr/Eric Garcetti (CC BY-NC-ND 2.0); Flickr/Steve Shook (CC BY 2.0)

• Editor: Danielle Thompson
• Graphics: Isaac Reese
• Additional Footage and Graphics: Justin Zuckerman
• Audio Production: Ian Keyser
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Colossal wildfire plumes that can be spotted from space have erupted on several California wildfires in the past months.

The Mosquito Fire burning in Placer and El Dorado counties produced torrents of smoke that soared tens of thousands of feet into the air. The cloud of soot and debris could be seen 60 miles away. Smoke from the blaze blanketed large swaths of Northern California and western Nevada, resulting in hazardous-level air quality.

Wildfire plumes in the western US are reaching greater heights than ever, a recent study reports — especially in California’s Sierra Nevada.

“The higher the plume reaches, the more likely it is to be transported rapidly over large distances,” said David Peterson, a meteorologist with the US Naval Research Laboratory-Monterey who was not part of the new study.

That means smoke, carrying a hodgepodge of chemical compounds, wafts farther distances and impacts more people. Wildfire smoke can irritate lungs and even cause wider health issues, especially for vulnerable populations like older adults, children and those with underlying health conditions.

A pyrocumulonimbus cloud from mosquito fire as seen from the air of a commercial airline flight over Sacramento, September 8, 2022. Video: Courtesy Gregory Van Acker

“Once these particles enter our bloodstream they can pretty much affect our entire bodies,” said Rosana Aguilera Becker, an environmental health scientist at Scripps Institution of Oceanography at UC San Diego.

The study, out of the University of Utah, used mathematical models to simulate plume heights for about 4.6 million wildfires. The analyzes examined burned areas detected by satellite in the western US and Canada from 2003 through 2020, during August and September. The researchers found that over those years, plume top heights increased hundreds of feet across much of the mountainous western US

But not all areas saw the same amount of growth.

“Sierra Nevada definitely stands out,” said study author John Lin, an atmospheric scientist at the University of Utah. In the Sierra, the researchers found that plumes grew about an additional 750 feet per year. On wildfires like the Mosquito, that’s meant intense plumes have soared to some 40,000 feet.

Firefighters watch a smoke column from a distance during the Mosquito Fire in unincorporated Placer County.

Stephen Lam/The Chronicle

Other regions, like the Southern Rockies and Eastern Cascades, increased by over 300 feet per year.

This upward trend increased even more after 2015, although the results weren’t statistically significant.

This uptick in plume top height was accompanied by increases in wildfire emissions that cause poor air quality, especially in the Sierra Nevada region. As the plumes explode in height, smoke can surge above the planetary boundary layer, the layer of the atmosphere closest to the ground.

You’ve encountered this boundary any time you’ve been on a plane descending to land.

“If you’re going into SFO, you probably are familiar with the times when it suddenly gets really rocky,” Lin said, “That’s a pretty good indication of where the (planetary boundary layer) starts.”

Smoke that makes it to these altitudes — about 3,000 feet above the ground — disperses more readily due to strong winds.

The researchers propose that the increase in wildfire plume height is due in part to climate change: Drier conditions and warmer temperatures enable fires at higher elevations. This vertical shift gives wildfire plumes a head start toward sending smoke particles higher into the atmosphere, above the planetary boundary layer.

Some plumes make it even farther, past the boundary between the troposphere and stratosphere. These are pyrocumulonimbus clouds, also known as pyroCbs.

“A pyroCb generally reaches the typical cruising altitudes of jet aircraft and beyond,” Peterson said. “So we’re talking 30,000 feet or higher.”

PyroCbs are similar in appearance to thunderstorm-producing cumulonimbus clouds: puffy and towering. A recent example is the immense plume produced by the Mosquito Fire, which soared to heights observed from airspace.

These clouds act like chimneys, funneling smoke up into the stratosphere.

“It’s a thunderstorm that’s ingesting smoke at the cloud base,” Peterson said. “And then it gets accelerated through that thunderstorm cloud and ejected through the top of it.”

The researchers identified increasing pyroCb activity within the Colorado Plateau over the study period. They also found a slight uptick in pyroCbs in the Sierra Nevada in recent years. Additional research is needed to get a clear picture of what’s happening with these extreme plumes, which are still a developing research area.

What is known, however, is that smoke that makes it to these altitudes can linger for months and spread over vast distances, potentially causing health issues for many.

“There is a great concern that wildfires will be — and are already — a major source of air pollution,” Aguilera Becker said.

Jack Lee (he/him) is a San Francisco Chronicle staff writer. Email: jack.lee@sfchronicle.com

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Don’t be fooled. The downtown area, the city’s primary economic driver, is teetering on the edge, facing challenges greater than previously known, new data shows. The wounds suffered by the economic core are deep, and city officials have yet to come up with a plan to make the fundamental changes that some economists and business leaders argue could make the area thrive again.

“A general economic decline is what we’re trying to avoid,” said Wade Rose, president of Advance SF, a business group that advocates on behalf of several major employers in San Francisco. The group is working with the city on short-term ideas to bring more people back downtown, but Rose agrees that the problem needs a rethink in the long run.

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Before the pandemic, office work was responsible for a whopping 72% of the city’s gross domestic product, according to the Controller’s Office — work that was heavily concentrated in the Financial District, the Market Street corridor, the Embarcadero and Mission Bay. A  precise definition for downtown doesn’t exist, and various city agencies use different boundaries, with some regarding it as the northeast portion of the city.

It is easy for San Franciscans who don’t work downtown to ignore it. The city is made up of neighborhoods that serve many of the needs of residents living in them. Relative to many other American cities, few people live in what is loosely considered downtown. The result is that many see the area as largely for office workers, tourists, conventioneers and a handful of destination restaurants.

When all office work shut down, BART ridership dropped catastrophically, and it is not projected to recover fully until the 2029-30 fiscal year at the earliest. The transit system’s looming deficit has given rise to whispers of a new regional tax to fill the gap. Without commuters spending money near their San Francisco offices each day, other downtown businesses closed, destroying the incomes of many who could ill afford it.

If swaths of shops, restaurants and cafes downtown stay shuttered, it could cause lasting harm to tourism, said Joe D’Alessandro, president and CEO of  San Francisco Travel, the city’s primary tourism and convention trade association.

“We don’t have a Disney park here,” D’Alessandro said, so San Francisco relies heavily on its hospitality industry to attract families and business groups. “Most of the hospitality industry is made up of small businesses,” he said.

Office employees make their way to work down a deserted Sutter Street at Montgomery Street in San Francisco. Jessica Christian / The Chronicle

A slow recovery

It has been a year since vacant office-space rates soared to their highest levels since the 2008 Great Recession, as some business activity has picked up. And while other major cities face large numbers of workers not going back into offices, San Francisco’s numbers are among the highest nationwide.

The San Francisco metropolitan area has consistently lagged behind nearly all other major urban centers in worker returns, according to office-occupancy trend data from Kastle Systems, a security company that monitors access-card swipes at client buildings.

In San Francisco’s downtown area specifically, office attendance has been even lower than reported. At The Chronicle’s request, Kastle provided swipe data for the eight ZIP codes that make up the city’s office-heavy northeast. The data shows the rate of worker return, relative to pre-pandemic levels, has not broken 30% and was 26.4% the week of May 18, the most recent period the company provided.

Other news reports have cited higher figures — for example, 34.6% for the same week in May — because they drew from Kastle data that included swipes from Oakland and Hayward, the two other large cities in the San Francisco metro area. And this is despite efforts by Mayor London Breed and some business leaders to urge workers to come back to their offices. A recent COVID-19 variant surge isn’t helping.

If those suites and retail spaces remain empty in the long run, “the buildings will be devalued,” Rose said, “which ultimately means that tax revenues will decline dramatically” and endanger city coffers. Another potential challenge, Rose said, is that many tech firms might see San Francisco, with its high real estate prices and taxes, as no longer worth it, given how many employees are working remotely.

“If the number of companies diminish and the number of people working in the tech industry diminishes, the network effect diminishes, and the digital engine starts cooling down,” Rose said. “And that is not a good thing.”

Even if tourism returns to pre-pandemic levels by 2024, as projected, the levels of remote versus in-office work will be the major factor in when and how the city, and downtown in particular, recovers. And the outlook is not encouraging.

“San Francisco is not likely to ever get office workers returning more than 50% of the time,” according to Nicholas Bloom, a Stanford University economics professor who studies remote work trends. In other words, an average of 2.5 days per workweek. Attempts to surpass that threshold would be like “trying to push water uphill,” he said.

Some downtown office buildings are all but deserted. Jessica Christian / The Chronicle

Bloom is part of a team that has conducted monthly nationwide surveys since early in the pandemic, each with between 2,500 and 5,000 participants. Respondents reported their employers’ latest plans for post-pandemic work policies — the number of days per week that staff would probably work from home.

In August 2020, the first instance of the survey, employers expected staff to work an average of 1.6 days per week in the office once society normalized. The figure has steadily risen since then and was 2.3 days in April, the most recent period measured. It appears to be stabilizing.

“It will likely flatten out at 2.3, 2.4, 2.5,” Bloom said. “I’ve talked to hundreds of employers, and that’s the same message we’re getting. So that triangulates very well.”

But remember: That’s just the national average.

“San Francisco would just look like a more extreme version of this,” Bloom said, because it surpasses many other cities in key traits that foster remote work. With its highly educated workforce and prevalent technology and finance industries, many of its employees can work on a laptop from the comfort of their own couches.

Indeed, a separate, one-time survey that Bloom conducted from January to March of this year found San Franciscans wanted to work remotely 53% more often than they did before the pandemic, outpacing office workers in the other cities studied.

A single commuter exits the Embarcadero BART Station near California and Drumm streets downtown. Jessica Christian / The Chronicle

Those figures stand in sharp contrast with budget projections from the city’s Controller’s Office, which rest partly on the assumption that remote work will normalize at 33%, meaning workers would be in the office two-thirds of the time.

“There’s not a precise calculation that led to our specific estimates,” said Carol Lu, citywide revenue manager for the office. “There is a lot of uncertainty about this projection.”

Her team based its estimate on the level of office attendance that some major employers like Google and Apple were requiring, as well as what smaller employers expected and what experts in the commercial office market were hearing.

Two days per week of telecommuting, or 40%, was the most common answer. The office lowered it to 33% “to account for employees who choose to come into the office more,” Lu said, as well as “financial and legal industries which seemed to expect more days in the office than the technology companies.”

But Lu acknowledged “we don’t know how well hybrid plans will work for companies. We don’t know how telecommuting will evolve over time. We don’t know what employees’ expectations will look like a year from now.”

Bloom, on the other hand, is more certain.

“It’s pretty clear what’s coming,” he said. “The sooner I think we face that, and adjust, the better it will be.”

City revenues may suffer

Over time, multiple tax revenues for City Hall could be at risk: property taxes, from emptied buildings that drop in value; sales taxes, from businesses that are struggling or gone, and others. That could lead to a reduction of public services, Bloom said.

“My biggest fear is the city either has to slash spending on, say, police, or it aggressively puts up taxes on businesses to cover the shortfall and drives them out of the city,” he said.

In March, the Controller’s Office said it expects a budget surplus of $74.7 million over the next two years, based in part on the city’s projections of office-worker returns, federal financial aid and record-high returns on pension investments. But that estimate was revised downward to $15 million last month, in large part due to expected salary increases for public-sector union workers.

Remote work aside, vacant offices — space that is either not leased or leased by an absent tenant who is trying to sublease it to recoup rental costs — are of continuing concern. A record high 20.4 million square feet of San Francisco office space, or roughly 24% of the citywide total, was vacant at the end of the first quarter of this year, according to real estate brokerage firm CBRE.

Vacancies could increase as companies get better at coordinating their hybrid staff, efficiently staggering in-office days so they can permanently reduce their total square footage, Bloom said.

A former Walgreens is one of many deserted storefronts along Kearny Street in the Financial District. Jessica Christian / The Chronicle

Businesses hobbled

The impact on local businesses cannot be overstated. During the pandemic, absent office workers’ earnings stopped flowing to cafes, retail outlets, restaurants and entertainment. Even once office work normalizes, the average worker will still spend an estimated $5,293 less per year in San Francisco, according to joint research by Bloom and economists at the Instituto Tecnológico Autónomo de México and the University of Chicago.

The fallout: Empty, abandoned office and commercial spaces mar the Financial District and surrounding areas. Many of the windows are bannered with signs for leasing opportunities, an odd appeal along these sparsely inhabited streets, where depressed consumer demand is obvious.

On one stretch of Kearny Street between Sutter and Pine, The Chronicle counted 11 closed ground-floor businesses out of nearly 50.

Casualties include neighborhood favorites like Topsy’s Fun House bar and Pachino Pizzeria. At Anthony’s Shoe Service, Gino Gentile is holding on for now. His family has run the business for 56 years, and in the “before times,” Gentile managed a team of five people. Now it’s down to him, and he’s far from turning a profit.

Gino Gentile of Anthony’s Shoe Service looks out the window of his shop on Kearny Street in the Financial District. Gentile now takes clients by appointment only, and has scaled down from a six-person operation to working solo due to reduced clientele Jessica Christian / The Chronicle

“As far as really getting an income? Not an option. Not even close. I’m just living off my savings,” Gentile said. “Eventually, I’m going to have to scale down.”

Some commercial real estate firms say that as interest in opening businesses downtown has dropped, it has risen in other areas of the city.

“We had our best year in 2021,” said Santino DeRose, managing broker at Maven real estate. “The neighborhoods by far, where people lived and worked, came back the fastest.”

Top: a closed sign sits in the window of the former Vision First optometrist now shuttered along Kearny Street. Above: an office building at 181 Fremont St. is seen through an empty Salesforce Transit Center in the South of Market district of San Francisco. Jessica Christian / The Chronicle

Searching for solutions

For city planners, businesses and residents, the question is, what’s to be done?

City officials and business leaders are working together, understanding that unless the city can defy national remote-work trends, its economic core will be forever altered.

“The goal is not to assume that offices and those tenants renting those offices are themselves going to just go back to five days a week in the same size footprint in the office buildings that they were in,” said Kate Sofis, director of the San Francisco Office of Economic and Workforce Development. “I think that’s a permanent change.”

Sofis’ office is working with business leaders to craft a strategy for bringing the economic core back to life. The immediate plan is to hold recurring events like concerts in local bars, restaurants and public spaces to entice office workers and others to the area. Breed has pitched spending $48.9 million over the next two fiscal years on a variety of  pandemic recovery efforts, including events.

As these efforts get under way, Sofis will watch for upticks in tourism and daily commuters into the city, among other key metrics. If, about six months from now, those figures are stalling out, “that’s when we really need to sort of look at bigger guns,” she said, declining to clarify what that might entail.

The city is searching for ideas to bring workers and others back to Financial District streets like Sutter and Kearny, which were emptied by the pandemic. Jessica Christian / The Chronicle

“It’s a bit premature for us to share specifics at this stage,” said Gloria Chan, the office’s director of communications, in a follow-up email. Ideas for new initiatives would result from conversations with the area’s stakeholders, she said, focused on things like keeping streets cleaner, attracting new businesses and encouraging office workers to eat at local restaurants.

Sofis said the six-month timetable might change in response to big environmental upsets, for instance “another significant wave of the coronavirus.”

“You don’t want to be planting something in the ground where the ground is still shifting,” Sofis said. Bloom agrees that there is no rush, citing the uncertainty of the pandemic.

“It seems little,” said UC Berkeley economist Enrico Moretti. “Concerts and events like those are a good idea, but they’re likely to help on the margins. I don’t think they’re going to be transformative.”

If officials are looking for immediate fixes, then Breed should require all municipal workers to fully return to the office, Moretti said. To sweeten the deal, maybe the city could cover those people’s transit costs, he added.

“I’m surprised by how slowly the mayor is bringing back the public workforce,” Moretti said. Requiring a full return would set an example for the private sector, increase BART ridership, “and it would be a shot in the arm for the small businesses that have been struggling for two years.”

In November, Breed required that city staff work on site at least two days per week, though individual departments could demand more — and that is still the policy, said Aliya Chisti, senior policy analyst at the San Francisco Department of Human Resources. Chisti did not directly answer the question of whether Breed could immediately require full-time office attendance. Instead, she said in an email: “The Interim COVID-19 Telecommuting Policy is an addendum to the City’s already existing standard Telecommuting Policy … and will continue for the duration of the local emergency unless ended sooner by the City with reasonable advance notice.”

Data on how many public employees have worked on site during the pandemic “is currently not centralized,” Chisti said, though she estimated it was about two-thirds. The total public workforce is 36,782 people, said Mawuli Tugbenyoh, the department’s deputy director of policy and external affairs.

The owners of Nigella SF on Market Street in the Financial District have to keep one door locked to discourage unwanted intrusions. Jessica Christian / The Chronicle

Public safety a big concern

Any strategy that the city undertakes will have to account for fractious politics and two big, related concerns: homelessness and public safety.

“I hear it all the time, that people don’t feel safe walking around,” said Andy Chun, owner of Schroeder’s restaurant and multiple other businesses in the downtown area, and a board member of the Golden Gate Restaurant Association, which advocates for restaurants’ interests. Chun said he frequently sees “drug abuse, people using the street as a toilet,” though he said he doesn’t personally feel unsafe during the day.

Nancy Oakes, chef and co-owner of Boulevard on Mission Street near the Embarcadero, said the area is a hot spot for car break-ins — it’s happened to her twice — and can feel generally threatening. She recounted an instance in February when a man wandered in off the street and got aggressive with the floor manager.

“The manager approaches him, he gets punched. It happens again. Three guests get up and help remove him from the building,” Oakes said.

“It would be nice if we could feel safer,” said Rubie Kade Campbell, co-owner with James Russell Austin of Nigella SF Botanical Boutique, on Market Street near the Embarcadero. The duo moved into their downtown location during the pandemic, capitalizing on lower commercial rents and hoping to hold out until the streets came back to life and they could grow their clientele from interested passersby. The strategy worked, and orders have risen in recent months.

But with the renewed foot traffic, they must always be ready to react when someone struggling with severe mental illness enters and gets loud and frightens customers.

Nigella SF co-owner Rubie Kade Campbell  and co-owner James Russell Austin have confronted  safety concerns in their recently leased Market Street space. Jessica Christian / The Chronicle

“On any given day, we keep one door locked, and we’re ready to close the other very quickly,” Campbell said, adding that they try to avoid calling the police because they don’t want to land anyone in jail. “We’ve had people kick in our door. It’s hard. We feel for people, but we need to run a business.”

Stanford professor Bloom believes the city should consider using vacant commercial space for new housing that would help address San Francisco’s interminable affordability crisis. It would also create a local clientele to offset the impact of remote work.

“Apart from the transition cost, what’s not to like?” he said. Numerous news stories have detailed the high cost and complexity of conversions. But that only makes it difficult — not impossible.

UC economist Moretti supported the idea of converting work spaces to homes. “I don’t see an enormous downside, and I see all the potential upside,” he said. He cautioned that it wouldn’t immediately breathe life into the city’s core. Even in a hypothetical scenario “that let the property owners switch without any cost tomorrow, it would take many, many years for that to occur.”

Richard Florida, an urban theorist and professor at the University of Toronto, offered a more expansive version of the idea: Yes, downtown should get more housing, but that should include homes for low-income people and give rise to a “15-minute neighborhood.” All of a resident’s needs — work, recreation, groceries, laundry, school for children — should be within a 15-minute walk from their doorstep.

Florida presented the idea in an April meeting with city officials and business leaders. Robbie Silver, head of the Downtown SF Community Benefit District, said he has a forthcoming plan that emphasizes a more walkable downtown. It’s unclear how closely it will follow Florida’s vision.

Whatever plan takes root, the result had better be interesting, Florida said, quoting urban activist and writer Jane Jacobs:

“When a great place gets boring, even the rich people leave.”

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Lisa Qiu Li was the only person working on the ground a few weeks ago.

As a housekeeper at the Hotel InterContinental San Francisco, she has lived in San Francisco for more than 25 years – and has worked in hotels for 20 of them.

But on that August day she was confronted with a hotel guest. He was furious about the lack of new towels in his room and asked her to give him some immediately.

She had already given the last set to another customer who had just asked about it.

He broke out.

“He gets really mad at me and yells at me, ‘Is that a new towel? Give it to me! ‘”Recalls Li.

His harassment became so aggressive, Li said, that she feared he would physically beat her. She was hiding in the room she was cleaning up.

“I was really, really scared, and then I called the manager,” she said.

Li peered through the peephole, and when she saw that the customer had left, she ran to the elevators and asked to be moved to another floor – where hopefully she would not be bothered again.

Service employees of all stripes have dealt with bad people, especially during the pandemic. Poor dump trucks, unruly passengers, annoying customers; Rudeness and a lack of tact on the part of some members of the general public are a feature of working in any service industry.

But incidents like Li’s are becoming more common (and arguably less well known) for a variety of reasons.

The accommodations travelers were used to before the pandemic – think the daily cleaning of hotel rooms, fast room service, nightly bar service – have been all but eliminated by the coronavirus.

Eventually the hotel industry – like other minor facets of the travel industry – was hammered hard.

Statistics from the San Francisco Travel Association estimate that hotel room demand was down 68% year over year in 2020 – the largest decline in at least 11 years and perhaps one of the largest declines in the country.

And while other service industries are on their way to recovery from the pandemic, as first reported by SF Weekly, the San Francisco travel industry has recovered more slowly than other industries.

But hotel workers and the unions they represent are especially angry that hotels continue to fall short with their workers even as the tide begins to stabilize for the travel industry as a whole. Li told SFGATE that there are at least 30 to 40 other cleaners who are still on leave and are still waiting in the wings to get back to work.

This, coupled with the phenomenon of “revenge voyages” – the influx of jet-set tourists following a catastrophic event such as a pandemic – has created a confluence of problems for hotel workers.

Blanca Reyes coordinates housekeeping in the Hilton Financial District. She has worked for hotels for 31 years and says the work in the past few months has not been comparable to any experience in her three decades in the industry.

“It’s not like it used to be, it used to be very different from now.”

Hotel workers report that they were verbally abused.

Ralf Geithe / Getty Images / iStockphoto

Reyes told SFGATE that Hilton hotels have stopped cleaning all rooms on a daily basis (unless otherwise requested), which means that she has had to take angry calls from visitors for most of her shifts.

“The real stress we have is that the hotel, the company, didn’t assign the occupied rooms to be cleaned every day,” she said.

And, as Li noted, hotel guests who visit tend to stay much longer, which means that already strained housekeepers are forced to clean thoroughly after more guests. It is an added burden for workers who are already suffering from staff shortages.

This leads to incidents like the one she saw recently when a customer called her one evening and asked why his room was dirty.

“I said: ‘We don’t have any housekeeping on duty at the moment, everyone has gone home’. [he said], ‘You have to explain to me why my room isn’t ready,’ “she said.

“So I just tell him what the situation is like, why we don’t clean [his] Room. And he starts telling me, ‘Bitch, you have to tell me why my room isn’t ready.’ “

She endured worse verbal abuse, but she refused to utter the words used to hit her. And with this harassment comes the fear of physical harm to workers. A 2015 study found that eight out of ten female hotel workers have experienced verbal harassment and incidents of assault and assault on workers have surfaced across the country.

Hotel workers in San Francisco won a strike in 2018 that guaranteed them “panic buttons” in dire situations.

A Hilton spokesman told SFGATE that workers are receiving “de-escalation training” with guests and that their hotels are actively looking for more workers.

“These hotels are working to ensure that they continue to provide a safe environment for both guests and team members,” the Hilton spokesman said in a statement to SFGATE.

(IHG, which manages the InterContinental, did not immediately respond to a request for comment from SFGATE.)

Sure, one could argue that given the challenges of the pandemic, hotels need to keep costs down – be it by reducing hours for workers or reducing amenities for visitors. But now that travel is rushing again, the challenge of dealing with angry guests rests right on the shoulders of cleaners, cashiers and other hotel service employees.

May Lee works at the in-house Grab and Go at the Hilton in Union Square. And almost every other restaurant and food service in the hotel, she said, is closed for much of the week – even as hundreds of rooms fill up. This has resulted in long lines in front of their store, disgruntled customers and increased stress for guests and workers.

She remembered a guest waiting in line who was “so loud and angry that I could feel everyone in the cafe watching”.

And she knows that the guests won’t want to visit the hotel again because of a lack of staff.

“I’m so frustrated that we want to provide … good service to our guests so that they will come back,” she said. “Why do guests come back when they expect our hotel to be so tight that everything is closed and we can’t even do the basic things?”

As it stands, Lee’s fears are not entirely unfounded. At least four prominent hotel operators have announced plans to cut staff costs, the largest operational cost of running a hotel.

A Guardian report confirmed that at least three different hotel chain executives have pledged to cut full-time employees on investor calls.

The latest report on hotel cuts is from Hilton, which has two employees who spoke to SFGATE.

“The work we are currently doing with each of our brands is aimed at bringing them higher margin business and greater work efficiency, particularly in the household, food and beverage and other sectors,” said Christopher Nassetta, CEO of Hilton during a February call with investors, several outlets reported.

Li, Reyes, Lee, and other San Francisco workers know they will be the ones to take the outrage over the cost reduction.

“Sometimes we’re the only ones working on the floor all day,” said Li. “The guests only see us, the guest doesn’t see the manager, they don’t see the boss on the floor, right, they only see the housekeeping see the ground so the hotel infuriates them and the guests [get] mad at us. “

None of the hotel employees really blamed the guests for being so angry. It just hurts that their anger is out of place.

“I’m not blaming them for having reasons, but it’s not because we created this problem,” Reyes said.

More California travel stories

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A dirty and trash-strewn bathroom in Norfolk, Virginia in February 2021. Some families don’t even have that. Source – Yitzilitt, CC SA 4.0.

When they need to go to the bathroom, more than 1 million people in the United States must turn to chamber pots, school showers, and public toilets. Almost half a million households do not have basic indoor plumbing, new research has shown.

While some rural and indigenous communities have never had indoor plumbing, you may be surprised to learn that the vast majority of Americans “plumbered” live in urban areas – with one in three households in 15 Cities across the country, according to research by the Plumbing Poverty Project (PPP).

The Plumbing Poverty Project is a joint venture between King’s College London and the University of Arizona. The work is based on the community surveys of the US Census Bureau. The full analysis was released Monday in association with the Guardian as part of a long-running series exposing America’s water crisis.

The researchers found that even in some of the richest cities in the country, renters and people of color were more likely to live in a house with no running water or flush toilets. The situation is particularly dire in San Francisco, California and Portland, Oregon.

Both cities are considered to be advanced technology centers on the west coast with a growing wealth gap and a homeless crisis. And San Francisco has more billionaires than any other metropolis except New York and Hong Kong, according to Wealth-X.

In San Francisco, nearly 15,000 families live in homes without adequate plumbing. That number has increased 12 percent since 2000, while the median price of a home has tripled. The data also showed that while black Americans make up 9 percent of the city’s population, they make up 17 percent of households with no indoor plumbing.

Captive twilight real estate photography captured in Cleveland, Ohio as part of real estate and corporate virtual tours in 2020. Source – Captivlymedia, CC SA 4.0.

Here’s an example: In San Francisco, Rosa Ramirez and her two daughters lived in a studio apartment for $ 2,300 a month until recently. Yellow water was coming from the tap on the sink and the toilet could not be used because it was not connected properly; her landlord wouldn’t fix it.

The family went to a nearby donut shop or coffee shop to use the restroom. When the pandemic started, the doors were closed to them. “It was unbearable,” said Ramiréz.

“The history of sanitary poverty in San Francisco is inextricably linked with priceless housing, falling incomes, transformations in California’s post-recession rental sector, and racist prosperity gaps fueled by a kind of ‘anti-black urbanism’ that has either propelled blacks in San Franciscans precarious or out of the bay, ”said Katie Meehan, senior researcher at PPP and Professor of Environment and Society at King’s College London, according to The Hill.

Tenants in San Francisco make up less than half of households in the city’s metropolitan area, but nearly 90 percent of homes have no working plumbing, The Guardian reported.

The report also notes that cities like Milwaukee, San Antonio, Phoenix, Seattle, and Cleveland made little or no progress in improving plumbing problems between 2000 and 2017. All five of these cities have more than 3,000 households without proper plumbing.

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Art is always experienced through a personal prism of mood and experience that varies from moment to moment. So it’s really impossible to say whether the Labor leadership video Liz Kendall uploaded on YouTube is better or worse than the one Andy Burnham uploaded on YouTube. Admittedly, that’s mainly because they’re both pretty bad.

At least Burnhams looks like a guide video. It is a textbook “Man of the People” profile piece. There’s our Andy, a brother and a son and a husband and a father. There’s our Andy, eating store-bought sandwiches and making keepy-uppies. There is our Andy, who is played by Monica von Friends at the university. There’s our Andy talking about himself next to a suspiciously pristine white leather sofa while his buddy Charlie Falconer whines about what a good guy he is. I wonder who this “Charlie Falconer” character is? Maybe he’s a greengrocer. Or a chimney sweep. Perhaps we’ll never know – surely he’s not related to longtime Labor colleague Lord Falconer?

The message from the Burnham video is that Andy is just like us. He is a man you can trust. That is, as long as you want him to be a man you can trust. If not, just say the word. He can change. He can be whatever you want as long as he’s in power. That’s the most important. Nice, sweet strength.

The Kendall video is something else entirely. She is the only star. We don’t learn anything about their life. We don’t learn anything about their family, background, regrets, or ambitions. The only thing we learn about Liz Kendall is that she doesn’t know what an erase key is.

At least that’s the only possible explanation for her confusing approach to writing. The video shows the process by which Kendall got into creating her own narrative for the video we’re watching. First she writes it all down on a notepad. Then she carefully types it into a computer. There can’t be any mistakes. The last time she tried typing a speech into a computer from scratch, she misspelled the word “aspirational” and couldn’t figure out how to undo it, and she had to toss the entire computer in the trash can.

Sometimes Kendall gets up and paces up and down. The lamp is on. She is the last person in the office. This is what a Kendall tour would look like. If you want your leader to take 3 times longer to complete a simple task, she is your wife. If you want someone to squint the technology like it’s trying to sell her a seedy timeshare, she is your wife. If you’re looking for a leader who lives in an abandoned MFI home office that could be floating around in space for anyone who damn well knows, the choice is clear. You have to choose Kendall.

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